Lower miners, BP and Rexam weigh on FTSE

The FTSE 100 started the day in an upbeat mood, having clocked up an 11-day rally on Monday but is now hovering around the unchanged mark as a positive update from Sage and rises for the banks are offset by further falls for Rexam and weaker miners.

For those who have escaped the slew of record-streak stories (from this blog included) if the FTSE 100 ends the day in positive territory it will mark the 12th straight session of gains, the longest such run in the index's 25-year history.

At 10am the FTSE was down 2.7 points at 4,583.5, having managed gains of 30 points at one stage.

The rally of the last fortnight comes amid thin summer volumes and although it has helped the index of leading shares to rise more than 10% since the kick-off on July 13, the swings of recent times remind us that such gains can easily be wiped out in the space of a few days.

Anthony Grech, market strategist at IG Index noted last night:

"UK shares today seemed to show the first signs of weariness creeping in after an impressive couple of weeks of straight gains... although sentiment in London is still positive it would be a tad over-optimistic to expect another 500 point rise over the coming fortnight.

It would not be surprising to see some more gradual strength from these levels to test the early 2009 highs of around 4700, as investors mark time again to see whether the broader economic picture is starting to turn rosier."

Software company Sage is the FTSE 100's top riser, up 4.8% at 194.3p, after it said trading was in line with expectations.

Chief executive Paul Walker said:

"There has been no significant change in market conditions during the quarter ended 30 June 2009 and we are planning for markets to remain testing. However, our proven business model and large, geographically diverse, customer base give us confidence that we are well positioned for these conditions and the eventual market recovery.

"We expect to report results for the year ended 30 September 2009 in-line with market expectations."

Property companies are also among the top gainers, making up some ground from Monday's sell-off when a cautious analyst report put them under pressure. Hammerson is up 2.5% at 333.5p and Liberty International is up 1.6% at 429p.

Rexam is the FTSE 100's top loser for the second day after Monday's news that the can maker is considering a rights issue. The shares are down 12p, or 4.2%, at 272.5p.

The miners are weighing on the wider market, with Xstrata down more than 3% and Antofagasta down almost 2%.

The next news that could give the market direction will come from the CBI's latest retail sales survey due at 11am. Economists polled by Reuters expect the distributive trades survey to show sales fell less sharply in July as shoppers took advantage of summer sales. The consensus forecast of the a headline reported sales balance of -12, up from -17 reported the month before.

"This would take it further above the average level of -25 for the first six months of 2009. However, it would be substantially below the balance's long-term average of +18."

"On the positive side, sharply reduced mortgage payments and moderating inflation is boosting many people's purchasing power. However, consumers remain under serious pressure from sharply higher and rising unemployment, markedly reduced earnings growth and heightened debt levels. Meanwhile, credit conditions are still tight and many consumers are keen to retrench due to serious concerns about eh economy and jobs,m as well as a desire to improve their balance sheets."